Consolidated Financial Results for the Fiscal Year Ended March 31, 2018
<under Japanese GAAP>May 10, 2018
Company name : NIKKO COMPANY
ID number: 5343 Stock listing : Nagoya Stock Exchange Second Section
URL: http://www.nikko-company.co.jp/
Representative : Akiko Mitani, Chief Executive Officer
Contact: Kazuya Nunokawa, Managing Officer (Phone: +81-76-276-2121)
Scheduled date of general meeting of shareholders : June 22, 2018
Scheduled date to submit Securities Report: June 25, 2018
Scheduled date to begin dividend payments: Preparation of supplementary materials for financial results : None
Holding of financial results meeting: None(All amounts are rounded down to the nearest million yen)
1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2018 (April 1, 2017 - March 31, 2018)(1) Consolidated operating results(Percentage figures represent changes from the same period of the previous year.)Net sales

Operating income

Millions of yen％

FY ended Mar. 31, 2018

13,963

8.1

222

238.1

FY ended Mar. 31, 2017

12,918

(5.3)

65

-

Note: Comprehensive income (Millions of yen) :Net income per
share

％

Millions of yen

Return on
equity17.0

Yen-

FY ended Mar. 31, 2017

5.42

-

％

Millions of yen

216

220.9

160

26.6

67

-

126

-

Mar. 31, 2017 :146 (-%)

Diluted net income
per share

Yen
6.87

％

Millions of yen

Mar. 31, 2018 : 230 (57.1%)

FY ended Mar. 31, 2018

Profit (loss) attributableto owners of parent

Ordinary income

Ordinary income
to total assets
%

%
16.7

Reference: Equity in earnings of affiliates (Millions of yen) : Mar. 31, 2018 : -Operating income
to net sales

Mar. 31, 2017 :

%

2.3

1.6

0.7

0.5

-

* Effective from the first quarter consolidated accounting period, the revenue previously included in "Rent income" under"Non-operating income" is described as "Net sales", The expenses previously included in "Selling, general and administrative expenses"
is described as "Cost of sales" ‘FY ended Mar. 31, 2017’ on (1) consolidated operating results is also stated according to the aboveway.
(2) Consolidated financial position
Total assets

Net assets

Millions of yen
9,466

As of Mar. 31, 2018

9,273
As of Mar. 31, 2017
Reference: Shareholders' equity (Millions of yen) :Equity ratio

Millions of yen
1,059

11.2

%

Yen
45.44

8.9

35.57

829
Mar. 31, 2018: 1,059

Net assets per share

Mar. 31, 2017: 829(3) Consolidated cash flow position
Net cash provided by (used in)

FY ended Mar. 31, 2018

Operating activities
Millions of yen
540

Investment activities
Millions of yen(301)

FY ended Mar. 31, 2017

866

(166)

Financing activities

Cash and cash equivalents
at end of period
Millions of yen
1,042

Millions of yen
(298)
(509)

1,102

2. Dividends
Dividend per share(Record date)1Q-endYen

2Q-end3Q-endYear-end

Yen

Yen

Yen Millions of yen

Yen

AnnualDividend on
Equity(consolidated)%%

Total dividends Payout ratio(annual)(consolidated)Year ended Mar. 31, 2017

-

0.00

-

0.00

0.00

-

-

-

Year ended Mar. 31, 2018

-

0.00

-

0.00

0.00

-

-

-

Year ending Mar. 31, 2019
(forecast)

-

0.00

-

0.00

0.00

1

-

3. Projected Consolidated Results for FY2018 (April 1, 2018 to March 31, 2019)
Based on our awareness that “a company is a public entity of society,” one of our important management goals is to be a company thataims to create a society that prioritizes business operations based on a long-term perspective instead of short-term profit. Accordingly, we
embrace the philosophy of public interest capitalism which is a concept that suggests that a company should deliver profits to its
shareholders as a result of enhancing the company value by contributing to all people and organizations with the same interests including
its employees, customers, suppliers, local communities, and the Earth.
Concerns have been raised that, due to the nature of the relevant systems, programs, and rules (business customs), the disclosure ofquarterly financial results and/or projected results may have multiple adverse effects. This includes the occurrence of an excessive focus onshort-term financial results and immediate stock price fluctuations and the narrowing of the investors’ speculative view when making
investment decisions.
This in turn hinders R&D investments, equipment investments, and employee development activities by a company based on a long-term
perspective, and results in a company’s negligence of its roles as a public entity, i.e., negligence of social contribution activities such as
sharing the company’s profits with employees, customers, business partners, and local communities.
As an attempt to address these concerns, a proposal to abolish the projected results form in financial briefs was presented in the Future
Investment Strategy 2017 (Cabinet Office, Government of Japan). This proposal was adopted in February 2017. Furthermore, the Diet
Members Caucus for Discussing a New Form of Capitalism (temporary name) is currently examining the possibilities of reviewing the
Financial Instruments and Exchange Act and other relevant laws in order to, for example, abolish the obligation to disclose quarterly
financial results.
Taking these circumstances and viewpoints into consideration, while the Nikko Group has been disclosing projected consolidated results foreach fiscal year up to FY2017, the Group recognizes the purpose and the significance of the revision made by the Japanese Government in
February 2017 and has decided to embrace the revision starting from FY2018, from which the Group has stopped disclosing its projectedconsolidated results.
※Notes(1) Changes in major subsidiaries during the period : None
(2) Changes in accounting policies, changes in accounting estimates, or restatement
1) Changes in accounting policies due to changes in consolidated accounting methods : None
2) Changes other than 1) above: None3) Changes in accounting estimates : Yes
4) Restatement: None(3) Number of shares outstanding (common shares)
1) Number of shares outstanding (including treasury stock) at the end of the period
Mar. 31, 2018 :24,172,000 sharesMar. 31, 2017 :2) Number of treasury stock at the end of the period
Mar. 31, 2018 :
864,148 sharesMar. 31, 2017 :3) Average number of shares over period
Mar. 31, 2018 :
23,310,703 sharesMar. 31, 2017 :

24,172,000 shares
858,236 shares
23,316,737 shares(Reference) Non-consolidated financial results
Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2018 (April 1, 2017 - March 31, 2018)(1) Non-consolidated operating results(Percentage figures represent changes from the same period of the previous year.)Net sales

Operating income

Ordinary income％

FY ended Mar. 31, 2018

13,791

9.7

190

291.2

190

177.0

164

(58.8)FY ended Mar. 31, 201712,574

(0.8)

48

-

68

-

398

-

Net income per
share

％

Net income

Millions of yen

Millions of yen％

Millions of yen％

Millions of yen

Diluted net income
per share

Yen

Yen

FY ended Mar. 31, 2018

7.04

-

FY ended Mar. 31, 2017

17.10

-

(2) Non-consolidated financial position
Total assets
Millions of yen

Net assets

Equity ratio

Net assets per share

Millions of yen%

Yen

As of Mar. 31, 2018

11,034

997

9.0

42.78

As of Mar. 31, 201710,859

833

7.7

35.76

Reference: Shareholders' equity (Millions of yen) :Mar.31, 2018: 997

Mar.31, 2017: 833*The financial statements is outside the scope of audit by Certified Public Accountants or Audit corporation.

2

Consolidated quarterly Financial Statements
FY03/2017(As of Mar.31,2017)(Millions of yen)
FY03/2018(As of Mar.31,2018)

1,158
1,795
1,439
515
348
241
164
(2)
5,661

1,098
2,192
1,273
581
432
264
57
(5)
5,893

6,765
(4,923)
1,842
4,378(4,133)244
1,226(1,116)
109
1,121
120
(84)
36
12
3,366

6,811
(5,085)
1,726
4,509(4,184)325
1,237(1,145)
91
1,121
99
(85)
13
65
3,344

1
83
85

0
70
71

55
105
(1)
159
3,611
9,273

56
103
(1)
157
3,573
9,466

2,499
2,460
334
23
32
81
221
1,080
6,734

2,679
2,400
159
12
88
121
170
1,140
6,772

231
14
6
25
1,311
119
1,709
8,443

191
1
5
34
1,282
119
1,634
8,407

3,470
1,584
(3,652)
(337)
1,065

3,470
1,584
(3,492)
(338)
1,224

0
(113)
(123)
(235)
829
9,273

0
(111)
(54)
(165)
1,059
9,466

(1) Consolidated Balance Sheet
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Costs on uncompleted construction contracts
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Lease assets
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Provision for product warranties
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Deferred tax ｌiabilities
Provision for directors' retirement benefits
Net defined benefit liability
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets3(2) Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Rent income
Commission fee
Gain on sales of wastes
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Sales discounts
Foreign exchange loss
Other
Total non-operating expenses
Ordinary income
Extraordinary Income
Gain on sales of noncurrent assets
Insurance income
Outplacement bounty
Total extraordinary Income
Extraordinary loss
Loss on retirement of noncurrent assets
Loss on fire
Total extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

FY03/2017(Apr.1, 2016-Mar.31,2017)(Millions of yen)
FY03/2018(Apr.1, 2017-Mar.31,2018)

12,918
9,117
3,801
3,735
65

13,963
9,925
4,038
3,815
222

0
9
9
15
11
12
59

0
10
15
17
―
18
62

36
10
―
10
57
67

27
12
14
14
68
216

1
84
17
102

1
―
―
1

2
17
19
150
21
2
24
126
―
126

1
―
1
216
56
(0)
56
160
―
160

FY03/2017(Apr.1, 2016-Mar.31,2017)(Millions of yen)
FY03/2018(Apr.1, 2017-Mar.31,2018)

126

160

0
(0)
20
20
146

0
1
68
70
230

146

230

―

―

Consolidated statements of comprehensive income

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests4

(3)Consolidated Statements of changes in equity(Millions of yen)

FY03/2017 (Apr.1, 2016-Mar. 31, 2017)
Shareholders' equity
Capital stock

Balance at the beginning of current period

Capital surplus

3,470

Retained earnings

1,584

Treasury stock(3,778)(336)

Total shareholders'equity939

Changes of items during the period
Profit (loss) attributable to owners ofparent126

126

Purchase of treasury stock

(0)

(0)

Net changes of items other thanshareholders' equity
Total changes of items during the period
Balance at the end of current period

-

-

126

(0)

125

3,470

1,584

(3,652)

(337)

1,065

Remeasurementsof defined benefit
plans

Accumulated othercomprehensive
incomeTotal net assets

(143)

(256)

683

Accumulated other comprehensive income
Valuation difference
on available-forsale securities

Balance at the beginning of current period

Foreign currencytranslation
adjustment

0

(112)

Changes of items during the period
Profit (loss) attributable to owners ofparent126

Purchase of treasury stock(0)

Net changes of items other thanshareholders' equity

0

(0)

20

20

20

Total changes of items during the period

0

(0)

20

20

146

Balance at the end of current period

0

(113)

(123)

(235)

829

(Millions of yen)

FY03/2018 (Apr.1, 2017-Mar. 31, 2018)
Shareholders' equity
Capital stock

Balance at the beginning of current period

Capital surplus

3,470

Retained earnings

1,584

Treasury stock(3,652)(337)

Total shareholders'equity1,065

Changes of items during the period
Profit (loss) attributable to owners ofparent160

160

Purchase of treasury stock

(0)

(0)

Net changes of items other thanshareholders' equity
Total changes of items during the period
Balance at the end of current period

-

-

160

(0)

159

3,470

1,584

(3,492)

(338)

1,224

Remeasurementsof defined benefit
plans

Accumulated othercomprehensive
incomeTotal net assets

(123)

(235)

829

Accumulated other comprehensive income
Valuation difference
on available-forsale securities

Balance at the beginning of current period

Foreign currencytranslation
adjustment

0

(113)

Changes of items during the period
Profit (loss) attributable to owners ofparent160

Purchase of treasury stock(0)

Net changes of items other thanshareholders' equity

0

Total changes of items during the period

0

1

68

70

229

Balance at the end of current period

0

(111)

(54)

(165)

1,059

1

5

68

70

70

(4) Consolidated Statements of Cash FlowsNet cash provided by (used in) operating activities
Income (loss) before income taxes and minority interests
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for product warranties
Interest and dividends income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment
Loss on retirement of noncurrent assets
Insurance income
Outplacement bounty
Loss on fire
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in claims provable in bankruptcy, claims
provable in rehabilitation
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Proceeds from insurance income
Outplacement bounty income received
Loss on fire paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investment activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Other, net
Net cash provided by (used in) investment activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Repayments of lease obligations
Purchase of treasury stock
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

6(Millions of yen)
FY03/2017(Apr.1, 2016-Mar.31,2017)(Millions of yen)
FY03/2018(Apr.1, 2017-Mar.31,2018)

150
411
(491)
36
50
(20)
(0)
36
0
(1)
2
(84)
(17)
17
196

216
378
3
40
38
(51)
(0)
27
9
(1)
1
―
―
―
(402)

489

(0)

(201)
112
246
933
0
(36)
(37)
―
17
(11)
866

(7)
179
63
495
0
(27)
(12)
84
―
―
540

(0)
12
(176)
1
(3)
(166)

(22)
22
(287)
1
(15)
(301)

(80)
―
(382)
(46)
(0)
(509)
(0)
189
912
1,102

(60)
100
(314)
(23)
(0)
(298)
(0)
(60)
1,102
1,042

[Segment Information]
1. Overview of reportable segments
Segments used for financial reporting are the Nikko Group’s constituent units for which separate financial information is available andfor which the Board of Directors performs periodic studies for the purposes of determining the allocation of resources and evaluating
performance.
The Group has established business divisions that comprise of the company and its subsidiaries and affiliates, and each division
conducts business in line with the comprehensive strategies they have devised for products, merchandise and services in both
domestic and overseas markets.
Therefore, the Group consists of segments by products, merchandise and services on the basis of the business divisions, and the“Functional Ceramics Product”, “Housing & Environmental equipment” and “Tabletop” are three reportable segments.
Industry Segment
Major Products
Septic tanks, Garbage disposal systems, System baths, Other FRP items,
Housing & Environmental Equipment
Water treatment facilities, Small wind turbine generator systems,
Multi-function interior boards
Functional Ceramics Product
Alumina substrates, LTCC substrates, Dielectric ceramics
Tabletop
Fine bone china, Fine vitrified china, Fine porcelain, Oven ware
2. Information related to net sales and profit or loss for each reportable segment
FY03/2017(Apr. 1, 2016 - Mar. 31, 2017)
Housing &Environmental
Equipment
Net sales
Sales to Outside Customers
Intersegment sales or Transfers
Total
Segment profit (loss)(Operating income (loss))
Segment assets
Other Items
Depreciation and Amortization
Increase in Property, plant andequipment and Intangible assets(Millions of yen, rounded down)Amounts on the
Segment
Adjustment
consolidated
financial
total(Note)
statements

Functional
Ceramics
Product

Tabletop

Other(Note 1)

8,571
8,571

2,252
2,252

2,040
2,040

54
13
67

12,918(13)
12,931(13)(13)

12,91812,918

280

334

(62)

0

553

(487)

65

2,814

1,526

2,892

12

7,246

2,026

9,273

143

109

104

0

358

53

411

80

15

80

0

176

10

187

Notes:1. The category "Other" is warehouse business which is a business segment not included in the reportable segments.
Notes:2. Below is a description of adjustments.
（1） Segment income adjustment of (487) million yen consists of expenses related to departments that do not belong to the reportablesegments.
（2） Segment assets adjustment of 2,026 million yen includes assets that do not belong to the reportable segments. The assets consists ofmainly surplus funds (cash and cash equivalents), long-term investment funds (investment securities).
（3） Depreciation and Amortization adjustment of 53 million yen consists of Depreciation and Amortization related to departments that do notbelong to the reportable segments.
（4） Increase in Property, plant and equipment and Intangible assets adjustment of 10 million yen consists of capital investments associatedwith departments that do not belong to the reportable segments.

FY03/2018(Apr. 1, 2017 - Mar. 31, 2018)
Housing &Environmental
Equipment
Net sales
Sales to Outside Customers
Intersegment sales or Transfers
Total
Segment profit (loss)(Operating income)Segment assets
Other Items
Depreciation and Amortization
Increase in Property, plant andequipment and Intangible assets(Millions of yen, rounded down)Amounts on the
Segment
Adjustment
consolidated
financial
total(Note)
statements

Functional
Ceramics
Product

Tabletop

Other(Note 1)

9,069
9,069

2,646
2,646

2,192
2,192

56
14
70

13,963
14
13,978(14)(14)

13,963
13,963

516

420

(181)

(0)

755

(532)

222

2,993

1,838

2,719

10

7,563

1,902

9,466

113

116

98

0

329

49

378

60

225

46

0

331

8

339

Notes:1. The category "Other" is warehouse business which is a business segment not included in the reportable segments.
Notes:2. Below is a description of adjustments.
（1） Segment income adjustment of (532) million yen consists of expenses related to departments that do not belong to the reportablesegments.
（2） Segment assets adjustment of 1,902 million yen includes assets that do not belong to the reportable segments. The assets consists ofmainly surplus funds (cash and cash equivalents), long-term investment funds (investment securities).
（3） Depreciation and Amortization adjustment of 49 million yen consists of Depreciation and Amortization related to departments that do notbelong to the reportable segments.
（4） Increase in Property, plant and equipment and Intangible assets adjustment of 8 million yen consists of capital investments associatedwith departments that do not belong to the reportable segments.

7